in

Scott Morrison urged to withhold GST funds from Victoria until COVID-19 lockdowns are lifted

Australians could be spared from having to bail out Victoria financially if its lockdowns continue thanks to a little known tax rule.

Victoria, Australia’s second biggest state by population, receives $17.7billion a year from the Commonwealth’s GST collections, which is paid for by ordinary people across the country.

That equates to about a quarter of the $69billion raised annually from the ten per cent Goods and Services Tax – added to shopping bills.

The Institute of Public Affairs, a free market think tank, calculated the Stage Four lockdowns in Melbourne were costing the Victorian economy $3.17billion a week.

Scroll down for video 

Australians could be spared from having to bail out Victoria financially if its lockdowns continue thanks to a little known old tax rule. Victoria, Australia's second biggest state by population, receives $17.7billion a year from the Commonwealth's GST collections

Australians could be spared from having to bail out Victoria financially if its lockdowns continue thanks to a little known old tax rule. Victoria, Australia’s second biggest state by population, receives $17.7billion a year from the Commonwealth’s GST collections

The IPA estimated 696,000 Victorian jobs would be lost between March and November. 

What Victoria receives from YOUR GST

Victoria has allocated $17.7billion from the Commonwealth Grants Commission in 2019

That equated to 25.7 per cent of the $69billion distributed to the states and territories from GST revenue

Victoria received 98.3 cents for every dollar of the GST collected in the state compared with 87 cents for New South Wales and 51.8 cents for Western Australia 

Source: Commonwealth Grants Commission 2019 report

Victoria’s Labor Premier Daniel Andrews on Sunday declared the lockdowns would not be eased until the state recorded fewer than five new daily cases on average by late October.

With New South Wales and Queensland even failing to reach that benchmark, the IPA’s director of research Daniel Wild wants the federal government to withhold GST funds from Victoria until it scrapped its economically-destructive lockdown. 

‘All GST payments and grants from the Commonwealth to Victoria should be frozen until the lockdowns in Victoria are lifted,’ he told Daily Mail Australia. 

‘The rest of Australia should not pay for the catastrophic ineptitude of Daniel Andrews.’ 

Australian Taxpayers’ Alliance policy director Emilie Dye said the rest of Australia shouldn’t be paying for Victoria’s use of the police ‘to silence the people’. 

‘The rest of Australia had no vote in electing the Andrews government; they shouldn’t have to foot the bill,’ she told Daily Mail Australia. 

‘The Victorian people are suffering. They are losing their businesses, their livelihoods, and their relationships. 

‘It’s time the state government felt some of the pain suffered by its citizens.’

Since 1942, the federal government has been the chief collector of income taxes instead of state governments after John Curtin’s Labor government changed the law during World War II.

The Institute of Public Affairs, a free market think tank, calculated the Stage Four lockdowns in Melbourne were costing the Victorian economy $3.17billion a week. The IPA's director of research Daniel Wild said: 'The rest of Australia should not pay for the catastrophic ineptitude of Daniel Andrews.'

The Institute of Public Affairs, a free market think tank, calculated the Stage Four lockdowns in Melbourne were costing the Victorian economy $3.17billion a week. The IPA’s director of research Daniel Wild said: ‘The rest of Australia should not pay for the catastrophic ineptitude of Daniel Andrews.’

But in 1978, Malcolm Fraser’s Coalition government enacted laws allowing the states to once again levy their own income taxes.

The states didn’t take up Canberra’s offer and Labor prime minister Bob Hawke in 1989 repealed the Fraser government’s Income Tax (Arrangements With the States) Act.

Former Liberal prime minister Malcolm Turnbull in 2016 however flagged the idea of allowing the states to have income taxing powers again.

His successor Scott Morrison supported the idea in March 2016 when he was treasurer in the Turnbull government.

‘We want to enter this new chapter and put behind us this process that has gone on for so long where there’s finger pointing and there’s states coming to the Commonwealth for money,’ Mr Morrison told ABC 7.30 host Leigh Sales.

Australian Taxpayers' Alliance policy director Emilie Dye said the rest of Australia shouldn't be paying for Victoria's use of the police 'to silence the people'. Pictured are police patrolling a Melbourne city street

Australian Taxpayers’ Alliance policy director Emilie Dye said the rest of Australia shouldn’t be paying for Victoria’s use of the police ‘to silence the people’. Pictured are police patrolling a Melbourne city street








‘We want to get to the point where states are in more control of their budget, because when states are in more control of their budget, they are better able to make choices and to assign funding to the priorities that they’ve set and they’ve put to their own people in their own elections.’

University of New South Wales constitutional law expert Professor George Williams, however, said allowing the states to levy income taxes again was a recipe for complication

University of New South Wales constitutional law expert Professor George Williams, however, said allowing the states to levy income taxes again was a recipe for complication

Mr Wild wants the Commonwealth to change the law so Victoria can instead levy its own income taxes instead of relying of GST money, distributed by the Commonwealth Grants Commission.

‘The Commonwealth should devolve the levying of income taxes from the Commonwealth to state governments,’ he said.

‘This will make state governments more responsive to the residents of each state, rather than distant bureaucrats.’

University of New South Wales constitutional law expert Professor George Williams, however, said allowing the states to levy income taxes again was a recipe for complication.

‘The states could resume collecting income tax, but there is no incentive for them now to do so,’ he told Daily Mail Australia.

‘The Commonwealth could stop allocating GST revenue to the states in favour of the states resuming the collection of income tax. 

‘It is hard to see though this would be a good idea, and would leave the tax system even more complicated.’ 

Source link

Michael Gove holds crisis talks with EU over UK tearing up Brexit divorce terms

Is Tesla's share price plunge a buying opportunity or warning?